- The silver market has rallied a bit during the trading session here on Thursday but did give back quite a bit of the gains by doing so, it suggests that although we are bullish, I think there is some work to do here.
- And with that, I think you have to understand that this is a market that although bullish is seen a lot of external pressures and noises overall.
- All things being equal, the $37.50 level is an area that I would be paying close attention to as it is a previous resistance barrier that has been very important and did offer support for a few weeks.
As we broke to the upside, I think you have to look at this as a market that probably continues to see a lot of noisy and erratic behavior going forward at this point in time.
Caution Will Be Needed
But with this, I also would be very cautious to understand that although the market is positive, we are in a relatively slow time of the year. And this is something worth keeping in the back of your mind. The volume will pick up eventually, but as price has risen, we have seen volume drop overall. Because of this, I think you have to be cautious. You have to worry about short-term erratic volatility, but I still believe that the $40 level will be like a magnet for this market. If we break down below the $37.50 level, then we have the 50-day EMA offering support right along with the $35 level. It’s not until we break down below $35 that I would be concerned at that point, then we could really start to break down. But as things stand right now, I think we are looking at a grinding, but slightly positive market.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.